Correlation Between Kesko Oyj and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Sendas Distribuidora at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kesko Oyj and Sendas Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kesko Oyj ADR and Sendas Distribuidora SA, you can compare the effects of market volatilities on Kesko Oyj and Sendas Distribuidora and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kesko Oyj with a short position of Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Sendas Distribuidora.
Diversification Opportunities for Kesko Oyj and Sendas Distribuidora
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kesko and Sendas is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora and Kesko Oyj is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kesko Oyj ADR are associated (or correlated) with Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Kesko Oyj and Sendas Distribuidora
Assuming the 90 days horizon Kesko Oyj ADR is expected to generate 0.56 times more return on investment than Sendas Distribuidora. However, Kesko Oyj ADR is 1.8 times less risky than Sendas Distribuidora. It trades about -0.05 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.09 per unit of risk. If you would invest 1,047 in Kesko Oyj ADR on August 28, 2024 and sell it today you would lose (48.00) from holding Kesko Oyj ADR or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kesko Oyj ADR vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Kesko Oyj ADR |
| Sendas Distribuidora |
Kesko Oyj and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Sendas Distribuidora
The main advantage of trading using opposite Kesko Oyj and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Sendas Distribuidora can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora's long position.| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj vs. Ingles Markets Incorporated |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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